The Gorilla Radio archive can be found at: www.Gorilla-Radio.com. G-Radio is dedicated to social justice, the environment, community, and providing a forum for people and issues not covered in State and Corporate media. Gorilla Radio airs live Thursdays between 11-12 noon Pacific Time. Airing in Victoria at 101.9FM, and featured on the internet at: http://cfuv.ca and www.pacificfreepress.com. And check out Pacific Free Press TV on Twitter @Paciffreepress

Saturday, April 13, 2013

An open letter issued to Canadians by Royal Bank of Canada President and CEO Gord Nixon (read here) apologizing for his company's decision to shift 45 Canadian jobs to imported temporary foreign workers from India reflects a growing concern over the issue.

Immigration Minister Jason Kenny reacted to the scandal, stating, “The rules are very clear. You cannot displace Canadians to hire people from abroad.” And yet, RBC maintains it was acting in accordance with the rules. "The question for many people is not about doing only what the rules require - it’s about doing what employees, clients, shareholders and Canadians expect of RBC," Nixon argued in his letter.

RBC's predicament is just the latest incident calling into question the Harper Government's foreign temporary worker program, which permits Canadian companies to pay imported employees from other countries 15% less than equivalent Canadian workers.

The issue was brought into focus earlier this year with the controversy over a Chinese-owned mine in northeast BC planning to import 200 foreign labourers. The move prompted the Construction and Specialized Workers Union to launch a federal lawsuit, alleging that the company made no real effort to offer the jobs to Canadians first. Even BC Liberal Jobs Minister Pat Bell chimed in on a Vancouver radio program, calling the Harper Government's foreign temporary worker policy a failed program.

We have been reporting on this issue over the past year, raising questions about the Government and corporate resource sector's claims of labour and skill shortages to justify a now estimated 380,000 foreign temporary workers in Canada - despite mounting evidence that it's more about savings on labour and exerting downward pressure on Canadian wages across the board.

Herewith Gord Nixon's open letter to Canadians:

RBC has been in the news this week in a way no company ever wants to be.

The recent debate about an outsourcing arrangement for some technology services has raised important questions.

While we are compliant with the regulations, the debate has been about something else. The question for many people is not about doing only what the rules require - it’s about doing what employees, clients, shareholders and Canadians expect of RBC. And that’s something we take very much to heart.

Despite our best efforts, we don’t always meet everyone’s expectations, and when we get it wrong you are quick to tell us. You have my assurance that I’m listening and we are making the following commitments.

First, I want to apologize to the employees affected by this outsourcing arrangement as we should have been more sensitive and helpful to them. All will be offered comparable job opportunities within the bank.

Second, we are reviewing our supplier arrangements and policies with a continued focus on Canadian jobs and prosperity, balancing our desire to be both a successful business and a leading corporate citizen.

Third, our Canadian client call centres are located in Canada and support our domestic and our U.S. business, and they will remain in Canada.

Fourth, we are preparing a new initiative aimed at helping young people gain an important first work experience in our company, which we will announce in the weeks ahead.

RBC proudly employs over 57,000 people in Canada. Over the last four years, despite a challenging global economy, we added almost 3,000 full-time jobs in Canada. We also hire over 2,000 youth in Canada each year and we support thousands more jobs through the purchases we make from Canadian suppliers. As we continue to grow, so will the number of jobs for Canadians.

RBC opened for business in 1864 and we have worked hard since then to earn the confidence and support of the community. Today, we remain every bit as committed to earning the right to be our clients’ first choice, providing rewarding careers for our employees, delivering returns to shareholders who invest with us, and supporting the communities in which we are privileged to operate.

I’d like to close by thanking our employees, clients, shareholders and community partners for your input and continued support.

Sincerely,

Gord Nixon
President and Chief Executive Officer,
Royal Bank of Canada

Damien Gillis is a Vancouver-based documentary filmmaker with a focus on
environmental and social justice issues - especially relating to water,
energy, and saving Canada's wild salmon.

Friday, April 12, 2013

How Obama Defanged the EPA

It was a tumultuous tenure, productive by some accounts, lackluster by most, but one thing is for certain, Lisa Jackson’s short time as administrator at the Environmental Protection Agency was anything but dull. On December 27, 2012 the often-fiery Jackson announced she was not going to return for a second term, and it is surely not difficult to see why she’s fleeing her post.

Since President Obama was ushered into office in 2008, the EPA has consistently faced ridicule and criticism from corporate polluters and their greedy allies in Washington. On virtually every occasion Obama refused to side with Jackson’s more rationale, often science-based positions, whether it was cleaning up the air or forcing the natural resource industries to abide by existing regulations. Ultimately, the EPA is only as formidable as the White House allows it to be, and on Obama’s watch the agency has not received the support it has desired or deserved.

Take the case of the Deepwater Horizon oil spill. Even though those three horrible months watching oil spew into the Gulf have seeped out of our collective memory, the BP disaster is one of the largest stains on Jackson’s four-year stint at EPA. Soon after the underwater blowout, Jackson, a New Orleans native, demanded BP halt their use of the toxic dispersant Corexit 9500 to clean up their gushing mess. She took a tough line against a company that had gotten away with far too much for too long.

It could have been Obama’s iron-fist moment, where the young president stood up to the oil industry and permitted the EPA to run the operation instead of letting BP’s inept management have full control of the cleanup process.

Of course, after eight long years of President Bush, BP executives weren’t used to being bullied into submission by some bureaucrat, especially a surly woman at the EPA, so they dialed up their friendly White House staff and complained that Jackson had overstepped her boundaries. Obama quickly obliged and forced the EPA to bite its tongue. Then Obama’s Chief of Staff Rahm Emmanuel discreetly assembled administration’s oil response team. Lisa Jackson was conspicuously absent from the list.

Even though it was the largest oil spill the US had experienced in decades, Obama prevented the agency in charge of overseeing the country’s environmental regulations from being involved in any meaningful way. Could it have been that Obama surrendered to BP because he had two years earlier accepted more campaign cash from the company – a mix of cash from employees and political action committees – than any politician over the last twenty years? Not many in the environmental community were asking.

* * *

Following an EPA report on greenhouse gas emissions in 2009, Lisa Jackson appeared ready for a fight. In a written statement, Jackson declared carbon dioxide and five other greenhouse gases a threat to public health. No EPA administrator had ever made such bold comments.

“These long-overdue findings cement 2009’s place in history as the year when the United States Government began addressing the challenge of greenhouse-gas pollution and seizing the opportunity of clean-energy reform,” said Jackson.

It was her first major initiative at the EPA. This so-called “endangerment finding” was the necessary prerequisite that allowed the agency to enforce new fuel economy and greenhouse gas standards for motor vehicles and power plants. Jackson also moved to set stronger standards for mercury and toxic emissions and permitted California to implement its own set of greenhouse gas standards for vehicles, a reversal of a Bush-era policy.

This isn’t to say that Jackson enjoyed Obama’s support along the way. In fact, in some cases the administration outright opposed her efforts. In 2011 the White House moved to block the EPA from updating national clean air standards for smog. The episode echoed Bush tactics, where political expediency often trumped hard science. Sadly, Obama’s team was successful at stopping Jackson and the courts have stalled the EPA’s efforts to limit power plant pollution that blows across state lines.

“Disheartened would be a mild way to describe how clean air advocates felt when that happened,” said Frank O’Donnell of DC-based Clean Air Watch told CounterPunch. “Rather than rewarding Jackson for doing the right thing, the White House shoved her aside and literally adopted the polluter-friendly policy of … [President Bush] … and then proceeded to defend that flawed Bush policy in court.”

The message from the White House to clean-air advocates was clear: “Because the Republicans are so rotten on environmental issues, you’re stuck with whatever we do. If you don’t like it, tough luck. We don’t really care what you think. You have nowhere else to go.”

“I don’t recall any of the traditional clean-air champions in Congress raising hell over this. Party loyalty trumped substance,” recalls O’Donnell, who has spent decades working for better clean air standards in Washington. “William Faulkner once wrote, ‘Hollywood is a place where a man can get stabbed in the back while climbing a ladder.’ Lisa Jackson’s experience with ozone showed that an EPA administrator can get stabbed in the back by her boss just for doing her job.”

Jackson faced a similar uphill battle when it came to the issue of coal ash. In 2009 the EPA began the process to regulate coal ash, a byproduct of coal incineration, which contains toxic metals like mercury, arsenic, beryllium, cadmium, chromium and nickel. The United States produces over 70 million tons of coal ash annually. After numerous incidents where ash from power plants has made its way into groundwater supplies, environmentalists and concerned citizens have called for such coal waste to be regulated.

“The time has come for common sense national protections to ensure the safe disposal of these materials,” said Jackson when the EPA moved to first regulate coal ash, only to be halted by the White House. “Today, we are proposing measures to address the serious risk of groundwater contamination and threats to drinking water, as well as stronger safeguards against structural failures of coal ash impoundments.”

In 2008 a coal slurry impoundment at the Tennessee Valley Authority’s Kingston coal-fired power plant in Harriman, Tennessee, collapsed and more than 500 million gallons of toxic coal ash to enter the Tennessee River. Approximately 525 million gallons of black coal ash flowed into tributaries of the Tennessee River – the water supply for Chattanooga and millions of people living downstream in Alabama and Kentucky.

Obama wasn’t pleased with Jackson’s move to regulate filthy coal ash. In fact, he’s forced the EPA to delay its rules on multiple occasions. Despite lawsuits waged by environmental groups, as recently as January 2013 the EPA announced it “cannot provide a ‘definitive time’ for promulgating final regulations on the management of coal ash from power plants.”

No doubt it has been instances like these that prompted Lisa Jackson to leave the EPA and turn her back on Obama’s White House—a conflict adverse administration that more often than not made it difficult for Jackson to do her job. While she was no environmental crusader, as she defended fracking practices as well as nuclear energy, Jaskson did believe in regulatory enforcement. Her replacement, expected to be Gina McCarthy, will likely find the Obama White House as equally challenging in upholding these laws.

Israeli Journalist Amira Hass Sparks Furor at Home for Defending Palestinian Right to Resist

Amira Hass, the only Jewish-Israeli journalist to have spent almost 20
years living in and reporting from Gaza and the West Bank, recently
suffered a torrent of hate mail and calls for her prosecution after she
wrote an article defending the right of Palestinians to resist violent
occupation. In the article, Hass defended the throwing of stones by
Palestinian youth at Israeli soldiers, calling it "the birthright and
duty of anyone subject to foreign rule."

Hass said Israelis remain in
denial about "how much violence is used on a daily basis against
Palestinians. They don’t like to be told that someone has the right to
resist their violence."

Amira Hass joins us to discuss the reaction to her
piece and her response to the latest regional visit by U.S. Secretary of
State John Kerry. Despite vows to revive peace talks and free up the
Palestinian economy, Hass says the Obama administration wants to
preserve the status quo of occupation.

To Throw or not to Throw a Stone

by William A. Cook

A debate rages in Israel today on the truth of Amira Hass’s words “Throwing a stone is the birthright and duty of anyone subject to foreign rule. Throwing stones is an action as well as a metaphor of resistance” (Amira Hass, Haaretz, 4/3/13).

The day after Hass’ comment, Dr. Rosenberg offered these objections:

a. throwing stones after all can result in death and Hass does not mention that consequence,

b. justifying stone throwing “grants legitimacy to the activities of the government she condemns; and

c. stone throwing is “a natural right of every human being is futile and invalid, certainly in ethical terms.”

Conveniently, Rosenberg does not mention that the Palestinians have no army, no air-force, no navy, no comparable military ordinance of any kind to throw at the fourth largest state of the art military in the world, only stones; can the stone kill, yes, but so can $300,000 missiles and phosphorus bombs.

Do we justify death by missiles and phosphorus but damn death by stoning? Does the throwing of a stone justify the carnage of the Israeli IDF against the defenseless Palestinians? Where is the argument here? Is throwing a stone a birthright as Amira states or is that “futile and invalid” as Rosenberg claims?

Given the reality of the Israeli military power versus the feeble efforts of the Palestinians, children and teenagers hurling stones, the debate on birthright avoids the obvious: not to throw a stone.

“Listen to Cain as he walks beside his brother along the path of death: There is no judgment and no judge and no world to come! No reward will be given to the righteous nor any account given of the wicked. Such is the belief of those who would declare their independence of any responsibility for their brother, accept any blame for their deception as they accompany him to his death, or bear any guilt for the wickedness they inflict. Without judgment for behavior determined as good or bad, without reward for acts of love or compassion, without retribution for evil and wickedness against his brother, Cain is free to do what he wills to do. Ultimate freedom, a declaration indeed of independence. Abel responds to his brother in the only terms left to him as he walks to his death, a plea to conscience that binds all in mutual existence, a belief that ―There is indeed a judgment and a Judge and a world to come … and the wicked will be called to account. Without that understanding, those who will can, with impunity, plunder the poor, oppress the defenseless, act to pervert justice, and wreck violence and bloodshed on the world.”

Such is the moral dilemma Thoreau faced as he delivered his “A Plea for Captain John Brown,” (1859) as that “traitor” to the state faced hanging. Thoreau quotes Brown in his own defense:

“No man sent me here; it was my own prompting and that of my maker. I acknowledge no master in human form… I think, my friends, you are guilty of a great wrong against God and humanity , and it would be perfectly right for anyone to interfere with you so far as to free those you willfully and wickedly hold in bondage.”

Such is the moral dilemma Mahatma Ghandi faced as he sought guidance from Hinduism and the importance of action in one’s life, without concern for success; the Hindu text Bhagavad-Gita says, “On action alone be thy interest, / Never on its fruits / Abiding in discipline perform actions, / Abandoning attachment / Being indifferent to success or failure” (Wolpert 71).

Such is the moral dilemma Martin Luther King faced as he sat in the Birmingham jail, a threat to the state’s legal system that legislated the segregated lives of the countries African Americans:

“I am cognizant of the interrelatedness of all communities and states. I cannot sit idly by in Atlanta and not be concerned about what happens in Birmingham. Injustice anywhere is a threat to justice everywhere. We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly, affects all indirectly.”

And such was the moral dilemma the Jews in Warsaw faced “Between July 22 and September 12, 1942, (as) the German authorities deported or murdered around 300,000 Jews in the Warsaw ghetto:

“Armed with pistols, grenades (many of them homemade), and a few automatic weapons and rifles, the ZOB fighters (the Jewish Combat Organization, Zydowska Organizacja Bojowa; ZOB) stunned the Germans and their auxiliaries on the first day of fighting, forcing the German forces to retreat outside the ghetto wall. German commander SS General Jürgen Stroop reported losing 12 men, killed and wounded, during the first assault on the ghetto. On the third day of the uprising, Stroop's SS and police forces began razing the ghetto to the ground, building by building, to force the remaining Jews out of hiding. Jewish resistance fighters made sporadic raids from their bunkers, but the Germans systematically reduced the ghetto to rubble. The German forces killed Anielewicz and those with him in an attack on the ZOB command bunker on 18 Mila Street, which they captured on May 8.” (U.S. Holocaust Museum).

Such is the need to act, even metaphorically, when loss of life, threatened by those willing and capable of inflicting imprisonment, torture, or death on a person or persons is imminent and obvious. The right to life, to assert that right in the face of certain death, as is the fate of Abel, supersedes all other action. To throw a stone at a tank, the symbol of absolute power of another over personal freedom, to assert, yea even to glorify that birthright to live in freedom and peace in the world, supersedes the illegal laws of the state that occupies and oppresses.

Laws are only just when they protect the personal rights and dignity of all. That is the ultimate meaning resident in the Universal Declaration of Human Rights, and that is the criteria Israel must abide by in its occupation of Palestine. Otherwise, one must condemn the Jews that took their birthright to act against their oppressors or find their action a “right” based on some superior testament that negates such a right for the rest of humanity. The world cannot avoid its responsibility to protect the helpless; it must intervene in Palestine.

“Consider now the events of April 9-11, 1948, the eradication of the citizens of the town of Deir Yassin, a month before the Agency declared the existence of the Israeli state and the implementation of the UN Resolution to partition. This massacre became then and remains the signature example of the intent of the Zionist Consultancy and its agents to ethnically cleanse Palestine of its non-Jewish inhabitants. A plethora of documents abound that claim insight into the events that transpired during those three days, yet all attest to the extermination of the town’s citizens differing only as to numbers and agents responsible. Since Benny Morris relies on official documents released by the government and the military, I will use his summation as an example.

'Deir Yassin is remembered… for the atrocities committed by the IZL and LHI troops during and immediately after the drawn-out battle: Whole families were riddled with bullets… men, women, and children were mowed down as they emerged from houses; individuals were taken aside and shot. Haganah intelligence reported "there were piles of dead. Some of the prisoners moved to places of incarceration, including women and children, were murdered viciously by their captors… LHI members… relate that the IZL men raped a number of Arab girls and murdered them afterward (we don't know if this is true).' Another intelligence operative (who visited the site hours after the event) reported the 'adult males were taken to town Jerusalem in trucks and paraded in the city streets, then taken back to the site and killed… Before they were put on the trucks, the IZL and LHI men searched the women, men, and children [and] took from them all the jewelry and stole their money.' Finally, the 'Haganah made great efforts to hide its part in the operation.'11

Despite Morris’ accounting, 50 years after the events at Deir Yassin, Morton Klein, President of the Zionist Organization of America, attempted to revise history by denying that a massacre took place in his work, Deir Yassin, History of a Lie. Why? Why go to such lengths to deny what is so thoroughly documented? The answer is simple. Deir Yassin is a symbol of ethnic cleansing, of the determination of the Jews in Israel, controlled by the Zionist Consultancy and its armed forces, to “transfer” or kill the indigenous people of Palestine.

The truth symbolized by Deir Yassin is the calculated Zionist strategy “to terrorize Arabs in order to expel them on the way to depopulating their villages in order to repopulate them with new Jewish immigrants or to erase them from the map” (Passages adapted from the Introduction of The Plight of the Palestinians, Palgrave Macmillan, 2010, edited by W.A. Cook).

But let it be stated here on this 11th day of April as I pen this piece, a day of catastrophe that should never be forgotten, that the people of Deir Yassin did not go gently into that good night; they, like their Jewish brothers and sisters in Warsaw, fought valiantly against terrible odds, against a systematic brutality that has been described above. They fought for their birthright as Amira Hass has established was their right and duty to assert, if they were to proclaim to all the world that no one and no nation has the right to occupy a people’s land or to oppress them wantonly or to humiliate and subjugate them because they have the will and the means to imprison and enslave, to torture and brutalize, to deprive and destroy to accomplish their ends. Such a nation acts without rights and must be subject to international justice that all humans of good will can live in peace and dignity.

Victoria photographer Frances Litman had a vision: A weekend-long Earth Day festival. Not a protest, not a rally, she tells me – a “celebration” with happy people, environmental groups, vendors, and musicians coming together for the planet.

Litman set up a non-profit group, and in 2012 she and her crew hosted the first annual Creatively United for the Planet (CUP) festival in Oak Bay, a suburb of Victoria BC. The fest was a success, with only a small glitch – some events were scheduled for the same day and time as Victoria’s Earth Walk, then in its 31st year. But that was worked out; the schedules were re-jigged to minimize overlap and reduce wear and tear on eco-groups trying to divide their volunteer time between two venues.

In 2012, Earth Walk was suffering for lack of volunteers and running on a shoestring budget. Every year, on the Saturday before Earth Day, Earth Walk drew almost a thousand people (five thousand in its heyday) to celebrate with environmental groups, vendors and musicians. Like CUP, organizers wanted a festival, not a protest. And so it was for three decades.

This year, the Earth Walk volunteers have packed it in. They folded up their tent, and Earth Walk will join the better-organized and -funded CUP. No rally at the BC Legislature is planned. This time, the walk starts from Centennial Square at noon Saturday April 20 and ends at St. Ann’s Academy, where the CUP festival takes place.

CUP gets part of its funding from big-name sponsors like the Bank of Montreal and BC Hydro. The power company’s sponsorship sparked the second glitch.

The Peace Valley Environment Association has waged a long-running campaign against BC Hydro and its controller, the government of BC. So far, they’re winning – pickets and petitions have prevented the massive Site C Dam power project from breaking ground in the Peace region of northeast BC.

Earlier this year, CUP told PVEA it was not welcome at the festival. Litman says this was a misunderstanding. When a PVEA volunteer criticized the BC Hydro $2500 sponsorship, saying CUP “sold-out,” Litman replied, “If you feel that way, then maybe you shouldn’t come.”

“They looked at the list (of CUP participating groups) and saw PVEA and said, ‘We would give you the money, if they’re not allowed to participate.’”

Litman says other groups advised her to “take the money and run.”

“We needed the money but I was torn about the source. We said to Hydro ‘Look, we don’t support what you’re doing [at Site C and elsewhere], we’re not happy.’” On the other hand, she likes the PowerSmart program, which she says “at least makes people think about the environment and sustainability.”

Either way, Morrison and Litman agree the issue is resolved, at the cost of a few ruffled feathers. PVEA will have a table, as it did last year. Litman emphasizes once again that there will be “no rallies” and “no protests” at CUP. “This is a friendly event. We don’t want angry people. We’re celebrating. It’s through positivity that we’re making change.”

The CUP organizer says she was caught off guard by criticism over the way the issue was handled, and she has some choice words for other environmentalists. “What’s this – attacking people without going to the source?” she complained. “I thought the environmental movement was my community.”

“We need people to show up and not be pointing fingers,” Litman says. “People don’t want to see in-fighting.”

That kerfuffle is settled, but more questions have been raised about lack of diversity. Specifically, a lack of indigenous people. There are no Turtle Island natives or even any mention of First Nations on the schedule.

Litman says she is arranging for a blessing from a local Elder. But some indigenous activists may not be satisfied with what they consider “token” representation in the midst of a burgeoning indigenous arts and culture scene on Vancouver Island.

“While we support them [Idle No More] this festival is not the right time or place,” Litman says. She wants me to get the message out that “we welcome everyone in peace and this is not a protest.”

Mainstream environmental groups have plenty of baggage when it comes to disrespecting indigenous people and perpetuating neo-colonial attitudes. Earth Walk, for example, put little effort into partnering with indigenous people before 2012. Greenpeace has earned the enmity of indigenous groups it “sold out” with the Great Bear Rainforest compromise. There are dozens more examples.

Litman says if we want a vibrant environmental movement, we need to roll up our sleeves and make it happen. I agree. If we want a grassroots, independently-funded, fully inclusive movement, we will have to build it, together with our allies. It’s time to break our allegiance to the dominant corporate culture that’s brought the planet to the brink of catastrophe. It’s time to give back to the earth and support indigenous-led campaigns for environmental justice.

Creatively United for the Planet runs April 19-21 at St. Ann’s Academy. Festival admission is free. Ticketed events include speakers, films, and a fashion show.

Norway Tightens Noose on Free Speech!

by Don Staniford

The Norwegian Government's shameless attempt to suppress freedom of speech continue as lawyers for the state-owned corporation Cermaq
seek to enforce a permanent injunction against criticism of the
Norwegian-owned salmon farming industry. Appeal documents filed in the
BC Court of Appeal by lawyers working on behalf of Cermaq's subsidiaries
EWOS Canada and Mainstream Canada
seek to muzzle freedom of speech not only by The Defendant, Don
Staniford, but also by the general public (the appeal hearing will be
held in Vancouver on 28th May).

Cermaq is also seeking "substantial" damages in order to "send a strong message to Mr. Staniford and others of a like mind":

During the 20-day trial in 2012, Cermaq's lawyers detailed the terms
of the injunction - referred to as the 'No Future Defamation Term':

If Cermaq’s lawsuit and injunction
are successful, over fifty statements will be deemed illegal and “any person”,
“servants” or “agents” will be ordered to remove the ‘Defamatory Words’ from the
internet. The permanent injunction would outlaw bumper stickers like ‘Friends
Don’t Let Friends Eat Farmed Salmon’ and 'Wild Salmon Don't Do Drugs'
and truthful statements corroborated by peer-reviewed science such as
‘Salmon Farming Spreads Disease’ and ‘Salmon Farming Kills Wild Baby
Salmon’.

"Norway now rivals China in its abuse of freedom of speech and the
Draconian measures sought to suppress dissent," said Don Staniford of
the Global Alliance Against Industrial Aquaculture (GAAIA). "The
Norwegian Government, via their state ownership of Cermaq, is abusing
the Canadian courts to muzzle global criticism of Norwegian-owned salmon
farming. Norway’s reputation as a champion of free speech now lies in
the gutter along with the Nobel Peace Prize it awarded in 2010 to the Chinese dissident Liu Xiaobo. Shame on Norway, shame on Cermaq!"

"You cannot appeal the truth," said The Defendant, Don Staniford.
"The fact is that salmon farming kills all around the world and, like
cigarettes, should carry a global health warning. Cermaq should stop fighting a losing legal battle and start
relocating disease-ridden salmon farms away from wild salmon. For the
sake of our global ocean, our children's health and the health of our
environment, we should stub out salmon farming from the face of the blue
planet."

The appeal hearing will take place in Vancouver on 28th May at the BC Court of Appeal.

Thursday, April 11, 2013

Gaza’s Siege Intensifies: The Plan to ‘Moderate’ Hamas, Control Gaza

On Sep. 17, 2012, Ismail Haniyeh, Prime Minister of the
Hamas government in Gaza, made another appeal to his Egyptian counterpart
Hisham Kandil to consider setting up a free trade area between Gaza and Egypt.

The reasonable idea would allow Egypt to support Gaza’s
ragged economy while sparing Cairo the political fallout from destroying
hundreds of tunnels that provide 1.6 million Palestinians a lifeline under a
continued Israeli siege. Palestinians in Gaza rely on goods smuggled through
tunnels and to a lesser extent United Nations handouts to survive.

“We explained the concept in detail (..) the idea is to
alleviate the economic hardship in Gaza,” Hamas official, Taher al-Nono was
then quoted in Reuters. Kandil promised to look into the matter, indicating
that it was too early for a response.

However this proposal was introduced before and repeatedly
after the September meeting. It should have at least served as the basis for a
serious platform of discussion regarding future cooperation between Gaza and
Egypt on this urgent matter. But Cairo neither responded nor offered an
alternative to end Gaza’s seemingly perpetual misery. Even worse, for several
months now and notably since the deadly August 5 attack in Sinai by unknown
assailants – which killed 16 Egyptian border guards - the Egyptian army has
actively been destroying Gaza’s tunnels.

According to a Gaza-based economist Maher Al-Tabbaa, “30
percent of Gaza's goods come from the tunnels.” But other estimates, cited by
Reuters, place the food reliance on smuggling at 80 percent. Without tunnels,
and no real, long term alterative, Gaza will delve deeper into poverty and the
crisis will likely reach unprecedented levels.

But why is post-revolution Egypt maintaining the very policy
of isolating Gaza which was first espoused by former Egyptian dictator Hosni
Mubarak?

Despite grave humanitarian repercussions of the siege, the
subject is essentially political. Following the demise of the Mubarak regime, a
sense of euphoria was felt in Gaza and across the region that a revolutionary
government - especially one headed by the Muslim Brotherhood - is likely to
reverse an enriched legacy historically financed and guarded by American money
and political leverage. The price of the Camp David treaty signed between Egypt
and Israel in 1978-79 was meant to turn Egypt into a permanent political asset
for Washington and Tel Aviv in exchange for a fixed amount of money which
arrives mostly in the form of military aid. Mubarak had indeed delivered and
the late Egyptian intelligence chief Omar Suleiman was the personification of
that American success.

When Israel imposed a siege on Gaza following Hamas’
election victory in 2006, it mattered little that Egypt and Gaza had a shared border.
Israel seemed entirely comfortable that the Mubarak regime was on board, while
Palestinians in the Strip subsisted between occasional war and economic
hardship.

To suggest that Hamas orchestrated the murder of Egyptian
soldiers in the Sinai – which served as the army’s cue to further cut off Gaza
– is to have no understanding whatsoever of the collective psychology of
Palestinians in the Strip who continue to see Egypt as an oasis of political
hope and economic salvation. Moreover, the cultural and religious rapports
between Gaza and Egypt - which administrated the Strip for decades between 1948
and 1967 – is easily discounted.

Overwhelmed by the persisting attempts at its removal from
power, the Muslim Brotherhood and President Mohammed Morsi continue to approach
matters concerning Palestinians with utmost caution. Their detractors have
dedicated much energy and time to smear Palestinians, Hamas and Gaza in much of
Egypt’s privately owned media. Bizarre propaganda of completely besieged
Palestinians in Gaza smuggling weapons and drugs to the Sinai is creating a
state of confusion among many Egyptians regarding Gaza and its role in Egyptian
security chaos.

Too timid to challenge the many forces at play in Egypt,
Morsi’s government is offering little by way of helping Gaza overcome its
isolation. This hesitance has proven costly. Using the pretense of protecting
Egypt’s national security, the army is actively destroying the tunnels under
the leadership of defense minister Gen. Abdel Fattah el-Sissi. Reporting in
Israeli newspaper Haaretz on April 6, Zvi Bar'el estimated that 250 tunnels
were destroyed in March, while 76 were flooded with sewage, “after locating
them by means of satellite information, probably in cooperation with the United
States.”

‘Probably’ is an understatement, as the US government – and
other western powers - invested much funds and expertise in ensuring that Gaza
is fully quarantine. Throughout most of 2011, it was simply unthinkable in Gaza
that Egypt would continue actively cooperating with western intelligence to
keep Hamas isolated. In 2012 and especially after the August attack in the
Sinai, it became clear that whatever forces that were yielded by the January
2011 revolution, were simply too weak to impact reality on the ground.
According to Haaretz, “Egypt's political (and) military leadership (is) divided
over support for Hamas.” The longer that division persists, the deeper Gaza
sinks into despair. Naturally, some regional and international forces are
actively investing in the Egyptian division, wishing to tame Hamas’ political
independence.

And indeed there are signs that Hamas is now catering to
outside powers in an attempt to preserve itself and withstand the pressures
that preceded and followed its exit from Damascus as a result of the
uprising-turned-civil war in Syria. Some media report that Khaled Meshaal’s
reinstatement as the Hamas political chief would not have been possible without
heavy pressure from the head of Egyptian intelligence Gen. Raafat Shehata. With
Meshaal at the helm, the normalization between Hamas and Jordan and Qatar (a
major Hamas funder), among other regional powers, is likely to continue.
Moreover, according to Adel Zaanoun, reporting for Agence France Presse on
April 3, based on regional experts’ opinions, Meshaal’s re-elections “may
better Hamas ties with (the) West.” The fact that the Hamas elections, took
place in Cairo, one analyst suggested “is proof that Egypt will support the
movement in opening it up to the West.”

It is possible that the price to be exacted from the
Brotherhood to end regional and western interference in Egyptian affairs will
also include bringing Hamas inline. While Hamas’ Gaza leadership are being
denied access to any possible economic independence, some Hamas leaders outside
are being propped up as suitable ‘moderate’ candidates in any possible
Hamas-western normalization in the future.

That dependency is being slowly but cleverly crafted, as
it’s aimed at exacting political ‘compromises’ from Hamas in the long run. And
as if the Israeli siege and the destruction of tunnels are not enough, the
United Nations Relief and Works Agency (UNRWA) recently announced a
distribution cutoff of basic aid to 25,000 Gaza refugees, a decision that
“could exacerbate hardship caused by Israeli and Egyptian controls on the
isolated enclave's borders,” reported Al Jazeera on April 5.

Without alternative economic venues in the face of Israel’s
land and sea blockade, Egypt’s crackdown on the tunnels and UNRWA’s budget
cuts, the Hamas Gaza leadership is likely to seek alternatives in the form of
handouts which will come at a political price. In the long run, Hamas will face
difficult options, including splitting up or following the same detrimental
path on which Fatah and the PLO found themselves, leading up to the Oslo
‘peace’ fiasco starting in 1993. Only a constructive end to the Egyptian
political deadlock could offer Hamas in Gaza a third, more dignified
alternative and that is to be seen.

- Ramzy Baroud
(www.ramzybaroud.net) is an internationally-syndicated columnist and the editor
of PalestineChronicle.com. His latest book is: My Father was A Freedom Fighter:
Gaza's Untold Story (Pluto Press).

Logging BC's Coastal Treasures

by Ray Grigg - Shades of Green

Exasperation is the tone of the full page ad placed in a March edition of Victoria's Times-Colonist newspaper by the Discovery Islands Marine Tourism Group, a coalition of businesses associated with an ecotourism industry employing over 1,200 people and generating $45 million for the local economy. Their problem is logging, specifically in areas where they have established a strong and burgeoning economic foundation to replace a forest industry that has essentially deserted the region.

“The Discovery Islands,” explains the Group's spokesperson, Ralph Keller, “have become a world class destination worthy of protection. We've become the second most important marine wilderness destination in BC, behind Tofino/Pacific Rim, yet the government is managing the forests here like it's 1956. They're treating us like bystanders instead of major revenue producers and employers” (Discovery Islander, “Tourism Businesses Slam BC Liberal Forest Policies”, Mar. 22/13).

The source of this problem has two components. The first is the elimination of appurtenance, the stipulation that once linked logging of Crown land with the local processing of logs. This traditional arrangement generated lucrative employment in the manufacture of lumber, pulp and paper products. When appurtenance disappeared, so did most of the mills which were part of a broadly based forest industry that had economic relevance and social respectability.

“The once great forest industry,” Keller notes, “is now just a logging industry acting with impunity, completely insensitive to our needs. They degrade our operating environment then send the timber not only out of the region, but out of the country” (Ibid.).

This points to deregulation, the second part of the problem.

“We're not against logging,” Keller explains, “but when the government revised the Forest Range and Practices Act in 2003, they gave all the power to the logging industry and left everyone else out of the planning process. We find out about forest development plans when we start to see trees being felled. We're being misled about forest industry intentions and have no meaningful way to influence cut block design. When we complain to government, they tell us to go talk to the licensee... . Who's writing the rules here? Whose forests are these?” (Ibid.).

Keller has a valid complaint. The particular forests of concern in the Discovery Islands are not privately owned — they belong to the people of BC. They are licenced to logging companies for the benefit of the larger community. If that benefit is no longer being served because of changed circumstances, then companies such as TimberWest have lost both their actual and moral legitimacy as key economic drivers. Indeed, in many cases, their logging becomes a net liability to the larger interests of the community. TimberWest, therefore, should conduct itself with a respectful deference to the other economic interests that are superseding logging in importance — ecotourism being a prime example.

A sampling of ecotourism's problem with logging in the Discovery Islands occurred in 2012 at Boat Bay on West Cracroft Island — the solution to this problem is presently postponed rather than solved. A logging company with the cutting rights on a Tree Farm Licence — the public's land — intends to cut 60 hectares above and around a kayaking base camp across from the world-famous Robson Bight. Such logging would ruin the aesthetic attraction of the base camp, isolate a nearby forest reserve, and create a visual eyesore for one of BC's most important scenic marine corridors.

The kayaking company did an illuminating economic analysis. It calculated that the economic value of the 60 hectares of timber to be logged was $3,600,000. Since the regeneration cycle meant the area could be cut only once every 60 years, the yearly economic value of the timber was $60,000. The economic value to the kayaking company, however, was $416,000 per year, or $24,960,000 for the same 60 year period. In stark contrast to the approximately 300 person-days employment from logging the 60 hectares just once, the kayaking company provided 20,160 person-days of employment during the 60 year cycle. And this simple economic analysis didn't include the employment and earnings for the 40 other ecotourism businesses using the same area. These calculations suggest that logging, when it is in conflict with high-use ecotourism areas, is economically and socially indefensible.

A more current example is evident on Sonora Island. Several cut blocks containing old-growth trees in the Discovery Islands are to be logged by TimberWest this summer — even though TimberWest contends it is not cutting old-growth because of its rarity.

“Yet in one block alone,” wrote a concerned islander in her letter to the editor of the Discovery Islander (“TimberWest Has No Plan Except Cutting Until It's Gone”, Ibid.), “we recorded 160 tall, straight, beautiful, old growth trees, mostly Douglas fir, the rest red cedar, about 700 years old.”

These remnant pockets of old growth forests should be treated as ecological treasures. They are all that's left after the incessant logging that has almost obliterated the magnificent lowland stands which were once the hallmark of the Gulf of Georgia. For the ecotourism industry and for our collective human legacy, these few remaining pockets should be places to visit, not opportunities to log. They are nature's temples where people from around the world can come to honour some of the largest and oldest living things on the planet. Any but the most venal of intentions would understand that these are sites for preservation and pilgrimage, rare opportunities for visitors to encounter the unimaginably slow time of primal forests and to lose themselves in silent and reverential awe. That screaming chainsaws should be allowed to desecrate such places is, frankly, a moral, aesthetic and economic obscenity.

Old growth trees should be sacrosanct. The butchery of clear cuts that scar green hillsides can be avoided by open consultation, thoughtful silviculture and sensitive logging. TimberWest has the professional skills and the social responsibilities to do better than affront Discovery Islanders and raise the hostility of the 120 tourism businesses that depend on the scenic grandeur of this treasured coast.

Correction: Alexandra Morton was very quick to note — she seems to be fastidious about accuracy — that the sushi from farmed salmon referred to in last week's column, Salmon Confidential, was not tested for ISA. She concurred with all the other material in the column.

Obama Fully Embraces Austerity with Cuts to Social Security, Medicare

by TRNN

Robert Pollin is Professor of Economics at the University of
Massachusetts in Amherst. He is the founding co-Director of the
Political Economy Research Institute (PERI). His research centers on
macroeconomics, conditions for low-wage workers in the US and globally,
the analysis of financial markets, and the economics of building a
clean-energy economy in the US. His latest book is Back to Full
Employment. Other books include: A Measure of Fairness: the Economics of
Living Wages and Minimum Wages in the United States, and Contours of
Descent: US Economic Fractures and the Landscape of Global Austerity.

BC’s public sector the smallest in Canada; public services short-staffed

Vancouver -A report released today finds that spending cuts and staff reductions have seriously weakened BC’s public sector, which is the smallest in Canada when measured as a share of the population.

“The message to the public has been that public sector employment can be cut – usually in the name of reducing the deficit – without any noticeable impact on programs or services,” says Iglika Ivanova, economist and author of Reality Check on the Size of BC’s Public Sector, released today by the Canadian Centre for Policy Alternatives.

“But in fact, the latest Statistics Canada numbers on public sector employment in BC tell a very different story.”

These statistics show:

BC has the smallest public sector in Canada. In 2011, there were 90 public sector employees per 1,000 people in BC, compared to 92 in Alberta and 100 in Ontario (which have the 2nd and 3rd smallest public sectors).

While other provinces have reinvested in public services since the early 2000s, BC made cuts in 2001–2004 and again after the 2008 recession. As a result, services aren’t able to meet the needs of a growing population.

The report also finds no evidence of an “overspending problem” in BC. In fact, provincial government spending as a share of the economy (or GDP) has dropped significantly over the past two decades.

“The current provincial deficit is the result of a revenue shortfall due to a decade of tax cuts followed by a slow economy, not overspending,” says Ivanova. "For example, in 2011/12 BC spent 2.3% of GDP (or $5 billion) per year less than in 2000/01."

Public sector workers in BC are vital to ensure high quality of life for all British Columbians. They are a diverse group that includes police and firefighters; employees of Crown corporations like BC Hydro and BC Transit; teachers, nurses, and social workers providing government-funded education, health and social services; and all employees in publicly funded colleges and universities.

They also include employees of ministries, departments and agencies at the municipal, provincial and federal levels who provide support for policy development and direct service delivery, as well as key regulatory and oversight functions.

Ivanova points to a number of consequences of public sector cuts, including:

Reduced monitoring and protection of forests and water, allowing for more illegal logging and pollution;

Larger class sizes in public and post-secondary institutions, reducing the quality of education;

Less homecare and other services for seniors; leading to hardship for seniors and overcrowding in hospitals; and

Less protection for vulnerable children in care, increasing the likelihood of abuse and neglect, as documented by the Representative for Children and Youth.

A reinvestment in a strong public sector would not only improve quality of life, but also reduce the economic and social costs associated with the high levels of poverty and inequality in our province.

[revised and expanded April 9, 2013 *This piece appeared in somewhat different and more decorous, somewhat desnarked form at Asia Times Online on April 10, 2013 as "China: Pivot Partner or Pinata?". ]

Somewhere in Beijing, Chinese foreign policy strategists are laughing…and also cringing at AP National Security Correspondent Lara Jakes’ current piece on North Korea.

Cringing because Jakes or her editors dropped a few clangers like this characterization of the pivot:

Much of the policy has centered on China — both in strengthening diplomatic ties and economic trade. But China is an unreliable American ally and has been suspicious about the U.S. entreaty, which it sees as economic competition on its own turf.

I’m sure China is disappointed to learn that it has been downgraded from global power to “unreliable American ally”.

And does anybody seriously believe that US Asian strategy—which includes the China-excluding Trans Pacific Partnership trade pact initiative, US injection into Chinese territorial disputes with its neighbors, and a full-court press on alleged Chinese cyberespionage transgressions—constitutes “strengthening diplomatic ties and economic trade”?

I think this factually and logically counterintuitive effort to package the US and PRC as "pivot partners" is something of a first in US media.

Does this risible effort at rebranding hint at anxiety in pivot-land as the North Korean crisis lumbers on and the US pivot strategy is unable to offer any hope of meaningful leadership, consensus, or resolution?

I detect the fine Italian hand of ex-East Asia honcho at the State Department, pivot architect, and, I suspect, would-be exploiter of the managerial vacuum at John Kerry’s State Department (no Asst Sec’y for East Asia yet) Kurt Campbell in Jakes’ coverage.

Campbell's pivot has turned into little more than an exercise in pissing off China by promoting a US-backed security and norm narrative that encourages East Asian countries to challenge the PRC’s regional pretensions...and encourages China to push back.

Pissing off China is perhaps a noble cause but a rather alarming geopolitical strategy, so Campbell is on call to reassure us that his beloved pivot is not a strategic cock-up.

When North Korean bellicosity elicits pivot-worthy and China-irritating reactions from the United States—such as big joint military exercises with Japan and South Korea meant further integrate the security coordination between the three nations-- Campbell goes the extra mile to shoehorn China into the “everybody loves the pivot”--or at least "North Korean brinksmanship is a bigger issue for China than the US pivot" narrative.

"They, I think, recognize that the actions that North Korea has taken in recent months and years are in fact antithetical to their own national security interests," former Assistant Secretary of State Kurt Campbell told a panel Thursday at the Johns Hopkins School of Advanced International Studies.

"There is a subtle shift in Chinese foreign policy" toward North Korea, said Campbell, who retired in February as the administration's top diplomat in East Asia and the Pacific region. "I don't think that provocative path can be lost on Pyongyang. ... I think that they have succeeded in undermining trust and confidence in Beijing."

Actually, to paraphrase David St. Hubbins, there is a thin line between “subtle shift” and “bullshit”...

I don’t think “trust and confidence” has ever characterized the relationship between the CCP and the prickly, independent-minded DPRK leadership, which has been equally obsessed with developing its own nuclear deterrent and looking for alternatives to Chinese domination since it lost its cherished status as a Soviet ally in 1989. And the PRC’s North Korea policy has always been about exploiting and, when desirable, punishing a vulnerable, troublesome, and resentful neighbor.

So I think what we’re looking at here is not a “subtle shift”; it is wishful thinking and ref-working by Kurt Campbell.

Campbell’s theme was further developed by Josh Rogin in his coverage of Campbell's remarks over at Foreign Policy magazine's The Cable blog.

As Rogin reported:

China has long considered North Korea a useful check against a united, pro-American Korean Peninsula. But Chinese frustration with Beijing could eventually lead to a more dramatic shift in Chinese foreign policy that would change the state of play in Northeast Asia, according to Campbell.

"It's very clear [to China]: If this is a buffer state, what is it good for?" he said.

For his US audience, Campbell seems to be promoting the idea that the North Korean nuclear tensions are, in a way, a good thing because that allows the US to buttress its military pivot into East Asia, thereby reassuring our allies and discombobulating the Chinese (if not the greedy and ambitious PRC military establishment), thereby making the case that North Korea is China's strategic liability (while, I think, willfully ignoring the significant value of the DPRK to China as an exclusive economic zone beyond its buffer status), thereby increasing the pressure on China to relieve its DPRK-exacerbated regional security stress by strongarming North Korea to America's satisfaction.

For the Chinese audience, Campbell may be dangling the possibility that, if China plays ball on North Korea, the PRC will attain the privileged position of pivot partner instead of pivot pinata.

But I don't think the PRC leadership will bite.

The best outcome that China can expect from knuckling under to the US and compelling North Korea to denuclearize is the undying hatred of the North Korean leadership if the DPRK survives...and a nasty security crisis if the regime implodes.

In the big picture, it would be geopolitical suicide for the PRC to make concessions in response to a US military buildup in Asia, because any concessions by the Chinese will not usher China into a G2 nirvana; it will simply reward and further encourage the US military buildup in Asia and adventurism by China's resentful neighbors.

In my opinion, the pivot to Asia will be met by asymmetric Chinese counterprogramming, not discreet surrender to the superior diplomatic and military might of the United States and abandonment of North Korea.

I will be pretty surprised if the Chinese took a genuine step toward modifying the behavior of North Korea, like issuing an ultimatum to Pyongyang to cease nuclear and missile tests or else face an across-the-board Chinese embargo.

I will, on the other hand, not be surprised if the whole crisis fizzles out, leaving North Korea with an enhanced portfolio of nuclear material, in a stable if not particularly affectionate relationship with China, and the PRC with an increased suspicion of US intentions in Asia.

And if the pivot can't exact desirable PRC behavior on North Korea--the biggest headache/most conspicuous piece of low-hanging fruit in the whole East Asian rebalance equation--then what good is the pivot?

But this interpretation is anathema to Campbell, whose pivot strategy relies on the assumption that a heightened military presence and more inflexible diplomatic stance vis a vis China will yield concrete dividends that justify the tensions and unpleasantness.

So it is a matter of some importance for Campbell to demonstrate to the US foreign policy establishment, journalists, and the interested public that the pivot, in the case of the North Korean crisis, is yielding genuine benefits by compelling China to pressure North Korea into discarding its irritating and destabilizing nuclear program in response to US saber-rattling.

Case unproven, in my opinion

Bernard over at Moon of Alabama has a good, derisive take on the wishful thinking that passes for tea-leaf reading by Western journalists (probably abetted by Obama administration officials anxious to assert that the US strategy on North Korea is not driving US-Chinese relations into a ditch) on Xi Jinping's Boao speech and the PRC's putative urge to dump North Korea.

The best geopolitical play by the United States has nothing to do with the atmospherics of the pivot and, indeed, is well known to everybody in the foreign policy establishment: rapprochement a la Burma with North Korea while somehow finessing the DPRK's determination to retain its nuclear weapon and missile assets.

North Korea gets a big new friend, China keeps its useful regional buffer minus the nuclear provocation and starvation headaches, and Japan and South Korea can move on to other regional economic and security preoccupations. That’s pretty close to a universal win-win, though the miserable North Korean people might not share the regional powers’ enthusiasm for a newly revitalized DPRK regime.

The PRC leadership is probably slightly bemused that the United States, in order to advance its security-heavy pivot concept, is pushing the DPRK away instead and forcing it back into the arms of China—a place where North Korea really doesn’t want to be.

It would be nice to think that US hostility toward North Korea is a profoundly subtle strategy of ensuring the regime's continued survival and hostility so that it can serve as a reliable pretext for the US security presence in North Asia.

Unfortunately, I don't think so. I think our North Korea policy is a reflection of general strategic drift and an inability to square the circle between our interest in rapprochement, US non-proliferation policy, and the anxieties of our allies.

Absent a viable strategy to denuclearize or engage North Korea, in public media the US punts to China—which lacks the standing to influence North Korea on this issue and has no interest in imploding the regime. That’s just meaningless PR kabuki. And China makes disapproving noises at Pyongyang in order to placate the West. More meaningless PR kabuki.

At the same time, the US—rather shortsightedly, in my opinion—exploits Pyongyang’s antics to move more military assets into the region to bolster the pivot narrative of US indispensability to regional security, thereby further pissing off China.

A clever plan—not—IMHO

Under the momentum of its own dubious logic, in response to the mission and budget creep imperatives of the US security establishment, driven by the separate political and military imperatives of Japan and other anxious and more-or-less ambitious regional players, and seduced by the easy opportunities presented by North Korean bellicosity, the “pivot” increasingly walks, talks, and quacks like “China containment”.

I don’t think the Obama administration is fooling the PRC leadership...and I don't think China is blaming North Korean nukes or China's dysfunctional relationship with Pyongyang for the eagerness of much of the US security establishment to promote the pivot into Asia.

But maybe American analysts are deluding themselves with the vision of the pivot panacea for the problem of rising China and its attendant discontents.

To me, the North Korean impasse demonstrates that the pivot is counterproductive because it simply demands that the PRC conform to US interests doubling as universal norms. In other words, it's zero sum. There's no win-win for China in just doing what Barack Obama wants.

A serious underlying problem for the pivot is that the US is increasingly boxed into zero-sum options for China as allies are becoming more independent and refractory (and US leadership, as demonstrated in the cases of Egypt, Libya, and Syria, becomes more hands-off and dilatory), and the list of win-win scenarios that the US can unilaterally deliver to the PRC is shrinking.

We're not offering carrots; just less of the human rights/intellectual property/cyberwar/freedom of navigation stick until time, circumstance, principle, and the priorities and opportunism of our allies combine to demand return to the China-bashing status quo ante.

By this reading, the pivot is a second-best, default strategy by a superpower with limited resources--primarily the ability to project power across the Pacific--at its disposal. It is instability without an endgame.

By the most generous reading, the pivot is an optimistic relaunch of the Star Wars/arms race strategy and economic stress test under Reagan that allegedly drove the USSR to spend itself into oblivion. But 2013 isn't 1976, China after thirty years of economic reform isn't Russia, and the current CCP leadership lineup is conspicuously devoid of gullible Gorbachevs.

As the Obama administration rather desperately finesses the pivot and tries to keep US-China relations ticking along despite its self-created problems, the PRC will look for the right opportunity to challenge the “pivot” through pressure on local US allies and demonstrate that the US lacks the military will (and disregard for economic damage) to pick up the military gauntlet thrown down by an increasingly assertive and suspicious PRC.

Absent a US willingness to fight World War III over the scraggly reefs and islets of the East and South China Seas, the pivot has no viable endgame except anticipating PRC regime collapse and the attainment of US hegemony in the Western Pacific by default. If that doesn’t happen,I would not like to be a small US ally with overoptimistic plans of relying on the pivot to counter overbearing Chinese economic, military, and diplomatic pressure (I’m looking at you, Philippines).

So, when one hears hopeful noises about Chinese reasonableness on North Korea, it means little more than the fact that the US has dug itself into a hole with its Asia policy and needs to pretend that the pivot narrative of the indispensable US security role in Asia is doing something more than accelerating the DPRK’s nuclear weapons program and generating Chinese anxiety and anger.

Lipstick on a pig, in other words.

*For readers outside the Americas who are unfamiliar with what a pinata is, the ATOl editors included a helpful description. To explain further, a pinata is a diversion frequently rolled out at birthday parties for children of Latin American ancestry. It's a hollow papier-mache figure of a burro, a seven-pointed star-ball, or some cartoon character (often reproduced with a deplorable disregard for licensing obligations) that is filled with candy. The pinata is suspended by a rope from a convenient tree limb and children, starting with the birthday kid, take a whack at it with a bat, broom handle, stick, or whatever in an attempt to break it open as the other children scream encouragement and instructions--or just scream. The kids take turns whacking the pinata until it bursts, releasing a shower of candy and triggering a mad rush of kids scooping up whatever they can.

In the realm of metaphor to call someone or something a "pinata" is to indicate that it is a relatively helpless or passive target of enthusiastic abuse whose destruction will (hopefully) unleash a flood of benefits. In the context of this article, it means that China, in the US strategic pivot to Asia, serves the role of a convenient object of US hostility, not a partner.

For your daily dose of I didn't know that Wikipedia tells us that the pinata possibly originated in China, as a new year's ritual in which an effigy of a cow containing seeds was broken open in order to ensure agricultural success. I suspect it developed as a practical alternative to the sacrifice of a real, expensive cow, just as the first Qin emperor broke with Zhou tradition and decided to protect his tomb with terracotta warriors instead of real, dead soldiers.

There is speculation that Marco Polo brought the pinata concept to Europe, where it became a Lent tradition in the 14th century. When the conquistadors came to Mexico, they discovered that the Aztecs performed a similar ritual to give offerings to one of their gods, Huitzilopochtli, in December. The Spanish co-opted the local tradition and added that special Roman Catholic secret sauce, creating a complex mid-December allegory of the battle against temptation (which included rotating the blindfolded pinata-whacker 33 times, once for each year of Christ's life). However, the pinata survived this grim catechistic interlude to flourish as a celebratory activity and useful metaphor.

Cyprus-style confiscation of depositor funds has been called the “new normal.” Bail-in policies are appearing in multiple countries directing failing TBTF banks to convert the funds of “unsecured creditors” into capital; and those creditors, it turns out, include ordinary depositors. Even “secured” creditors, including state and local governments, may be at risk. Derivatives have “super-priority” status in bankruptcy, and Dodd Frank precludes further taxpayer bailouts. In a big derivatives bust, there may be no collateral left for the creditors who are next in line.

Shock waves went around the world when the IMF, the EU, and the ECB not only approved but mandated the confiscation of depositor funds to “bail in” two bankrupt banks in Cyprus. A “bail in” is a quantum leap beyond a “bail out.” When governments are no longer willing to use taxpayer money to bail out banks that have gambled away their capital, the banks are now being instructed to “recapitalize” themselves by confiscating the funds of their creditors, turning debt into equity, or stock; and the “creditors” include the depositors who put their money in the bank thinking it was a secure place to store their savings.

The Cyprus bail-in was not a one-off emergency measure but was consistent with similar policies already in the works for the US, UK, EU, Canada, New Zealand, and Australia, as detailed in my earlier articles here and here. “Too big to fail” now trumps all. Rather than banks being put into bankruptcy to salvage the deposits of their customers, the customers will be put into bankruptcy to save the banks.

Why Derivatives Threaten Your Bank Account

The big risk behind all this is the massive $230 trillion derivatives boondoggle managed by US banks. Derivatives are sold as a kind of insurance for managing profits and risk; but as Satyajit Das points out in Extreme Money, they actually increase risk to the system as a whole.

In the US after the Glass-Steagall Act was implemented in 1933, a bank could not gamble with depositor funds for its own account; but in 1999, that barrier was removed. Recent congressional investigations have revealed that in the biggest derivative banks, JPMorgan and Bank of America, massive commingling has occurred between their depository arms and their unregulated and highly vulnerable derivatives arms. Under both the Dodd Frank Act and the 2005 Bankruptcy Act, derivative claims have super-priority over all other claims, secured and unsecured, insured and uninsured. In a major derivatives fiasco, derivative claimants could well grab all the collateral, leaving other claimants, public and private, holding the bag.

The tab for the 2008 bailout was $700 billion in taxpayer funds, and that was just to start. Another $700 billion disaster could easily wipe out all the money in the FDIC insurance fund, which has only about $25 billion in it. Both JPMorgan and Bank of America have over $1 trillion in deposits, and total deposits covered by FDIC insurance are about $9 trillion. According to an article on Bloomberg in November 2011, Bank of America’s holding company then had almost $75 trillion in derivatives, and 71% were held in its depository arm; while J.P. Morgan had $79 trillion in derivatives, and 99% were in its depository arm. Those whole mega-sums are not actually at risk, but the cash calculated to be at risk from derivatives from all sources is at least $12 trillion; and JPM is the biggest player, with 30% of the market.

It used to be that the government would backstop the FDIC if it ran out of money. But section 716 of the Dodd Frank Act now precludes the payment of further taxpayer funds to bail out a bank from a bad derivatives gamble. As summarized in a letter from Americans for Financial Reform quoted by Yves Smith:

Section 716 bans taxpayer bailouts of a broad range of derivatives dealing and speculative derivatives activities. Section 716 does not in any way limit the swaps activities which banks or other financial institutions may engage in. It simply prohibits public support for such activities.

There will be no more $700 billion taxpayer bailouts. So where will the banks get the money in the next crisis? It seems the plan has just been revealed in the new bail-in policies.

In an April 4th article in Financial Sense, John Butler points out that the directive does not explicitly refer to “depositors.” It refers only to “unsecured creditors.” But the effective meaning of the term, says Butler, is belied by the fact that the FDIC has been put on the job. The FDIC has direct responsibility only for depositors, not for the bondholders who are wholesale non-depositor sources of bank credit. Butler comments:

Do you see the sleight-of-hand at work here? Under the guise of protecting taxpayers, depositors of failing institutions are to be arbitrarily, de-facto subordinated to interbank claims, when in fact they are legally senior to those claims!

. . . [C]onsider the brutal, unjust irony of the entire proposal. Remember, its stated purpose is to solve the problem revealed in 2008, namely the existence of insolvent TBTF institutions that were “highly leveraged and complex, with numerous and dispersed financial operations, extensive off-balance-sheet activities, and opaque financial statements.” Yet what is being proposed is a framework sacrificing depositors in order to maintain precisely this complex, opaque, leverage-laden financial edifice!

If you believe that what has happened recently in Cyprus is unlikely to happen elsewhere, think again. Economic policy officials in the US, UK and other countries are preparing for it. Remember, someone has to pay. Will it be you? If you are a depositor, the answer is yes.

The FDIC was set up to ensure the safety of deposits. Now it, it seems, its function will be the confiscation of deposits to save Wall Street. In the only mention of “depositors” in the FDIC-BOE directive as it pertains to US policy, paragraph 47 says that “the authorities recognize the need for effective communication to depositors, making it clear that their deposits will be protected.” But protected with what? As with MF Global, the pot will already have been gambled away. From whom will the bank get it back? Not the derivatives claimants, who are first in line to be paid; not the taxpayers, since Congress has sealed the vault; not the FDIC insurance fund, which has a paltry $25 billion in it. As long as the derivatives counterparties have super-priority status, the claims of all other parties are in jeopardy.

That could mean not just the “unsecured creditors” but the “secured creditors,” including state and local governments. Local governments keep a significant portion of their revenues in Wall Street banks because smaller local banks lack the capacity to handle their complex business. In the US, banks taking deposits of public funds are required to pledge collateral against any funds exceeding the deposit insurance limit of $250,000. But derivative claims are also secured with collateral, and they have super-priority over all other claimants, including other secured creditors. The vault may be empty by the time local government officials get to the teller’s window. Main Street will again have been plundered by Wall Street.

Super-priority Status for Derivatives Increases Rather than Decreases Risk

Harvard Law Professor Mark Row maintains that the super-priority status of derivatives needs to be repealed. He writes:

. . . [D]erivatives counterparties, . . . unlike most other secured creditors, can seize and immediately liquidate collateral, readily net out gains and losses in their dealings with the bankrupt, terminate their contracts with the bankrupt, and keep both preferential eve-of-bankruptcy payments and fraudulent conveyances they obtained from the debtor, all in ways that favor them over the bankrupt’s other creditors.

. . . [W]hen we subsidize derivatives and similar financial activity via bankruptcy benefits unavailable to other creditors, we get more of the activity than we otherwise would. Repeal would induce these burgeoning financial markets to better recognize the risks of counterparty financial failure, which in turn should dampen the possibility of another AIG-, Bear Stearns-, or Lehman Brothers-style financial meltdown, thereby helping to maintain systemic financial stability.

In The New Financial Deal: Understanding the Dodd-Frank Act and Its (Unintended) Consequences, David Skeel agrees. He calls the Dodd-Frank policy approach “corporatism” – a partnership between government and corporations. Congress has made no attempt in the legislation to reduce the size of the big banks or to undermine the implicit subsidy provided by the knowledge that they will be bailed out in the event of trouble.

Undergirding this approach is what Skeel calls “the Lehman myth,” which blames the 2008 banking collapse on the decision to allow Lehman Brothers to fail. Skeel counters that the Lehman bankruptcy was actually orderly, and the derivatives were unwound relatively quickly. Rather than preventing the Lehman collapse, the bankruptcy exemption for derivatives may have helped precipitate it. When the bank appeared to be on shaky ground, the derivatives players all rushed to put in their claims, in a run on the collateral before it ran out. Skeel says the problem could be resolved by eliminating the derivatives exemption from the stay of proceedings that a bankruptcy court applies to other contracts to prevent this sort of run.

Putting the Brakes on the Wall Street End Game

Besides eliminating the super-priority of derivatives, here are some other ways to block the Wall Street asset grab:

(4) Make derivatives illegal, as they were between 1936 and 1982 under the Commodities Exchange Act. They can be unwound by simply netting them out, declaring them null and void. As noted by Paul Craig Roberts, “the only major effect of closing out or netting all the swaps (mostly over-the-counter contracts between counter-parties) would be to take $230 trillion of leveraged risk out of the financial system.”

(5) Establish postal savings banks as government-guaranteed depositories for individual savings. Many countries have public savings banks, which became particularly popular after savings in private banks were wiped out in the banking crisis of the late 1990s.

(6) Establish publicly-owned banks to be depositories of public monies, following the lead of North Dakota, the only state to completely escape the 2008 banking crisis. North Dakota does not keep its revenues in Wall Street banks but deposits them in the state-owned Bank of North Dakota by law. The bank has a mandate to serve the public, and it does not gamble in derivatives.

A motivated state legislature could set up a publicly-owned bank very quickly. Having its own bank would allow the state to protect both its own revenues and those of its citizens while generating the credit needed to support local business and restore prosperity to Main Street.

For more information on the public bank option, see here. Learn more at the Public Banking Institute conference June 2-4 in San Rafael, California, featuring Matt Taibbi, Birgitta Jonsdottir, Gar Alperovitz and others.

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